Arbitration Clauses, Jury-Waiver Clauses and Other Contractual Waivers of Constitutional Rights
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Presentation by Law Professor Stephen Ware at Duke University Oct. 4, 2002. Full article here http://papers.ssrn.com/sol3/papers.cfm?abstract_id=337121
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Arbitration Clauses, Jury-Waiver Clauses and Other Contractual Waivers of Constitutional Rights
- 1. ARBITRATION CLAUSES, JURY-WAIVER CLAUSES AND OTHER CONTRACTUAL WAIVERS OF CONSTITUTIONAL RIGHTS Stephen J. Ware sjware@samford.edu 205-726-2413
- 2. Alienating the 7th Am Jury-Trial Right • consenting to a contract containing an arbitration clause • consenting to a contract containing a jury- waiver clause
- 3. STANDARDS OF CONSENT Contract Law “Knowing” Consent • arbitration clauses • jury-waiver clauses
- 4. STANDARDS OF CONSENT Contract Law “Knowing” Consent • objective manifestations of consent • consent to forms w/ few exceptions • consent to unknown is norm • subjective “actual” consent • no consent to forms w/ few exceptions • sensitive to unequal
- 5. STANDARDS OF CONSENT Contract Law “Knowing” Consent • arbitration clauses • jury-waiver clauses
- 6. Federal Arbitration Act § 2 "written provision . . . to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." - unconstitutional for 75 years?
- 7. A Reading of the FAA • FAA covers only contracts between “two sophisticated businesses” • such contracts always involve “knowing” consent, • therefore, it was not until the 1980’s (with enforcement of employment and consumer arbitration agreements) that courts started to apply the FAA in an unconst. manner
- 8. A Rebuttal • FAA covers all arbitration agreements “involving commerce” except that it carves out Ks of certain employees • FAA has no other carve-outs, • therefore, FAA covers nearly all arbitration agreements
- 9. • “knowing” consent is lacking even in many cases involving “two sophisticated businesses” • therefore, FAA’s alleged unconstitutionality would have been apparent before the 1980’s A Rebuttal (cont.)
- 10. The Supreme Court has expanded the scope of the Commerce Clause since the 1920’s
- 11. STANDARDS OF CONSENT Contract Law “Knowing” Consent • FAA • caselaw on jury- waiver clauses - Does 7th Amendment require “knowing” consent for arbitration agreements
- 12. STANDARDS OF CONSENT Contract Law “Knowing” Consent • FAA • caselaw on jury- waiver clauses • constitutional waivers in criminal context • constitutional waivers in civil context
- 13. Prof. G. Richard Shell Contracts in the Modern Supreme Court • Lochner-era, 1870-1937 • New Deal/Warren Court, 1937-1971 • modern Court, 1971-present
- 14. STANDARDS OF CONSENT Contract Law “Knowing” Consent • FAA • caselaw on jury- waiver clauses • constitutional waivers in criminal context • Mitchell due process property deprivat.
- 15. STANDARDS OF CONSENT Contract Law “Knowing” Consent • FAA • caselaw on jury- waiver clauses • constitutional waivers in criminal context • Bremen and Carnival Cruise applied to non- U.S. forum
- 16. STANDARDS OF CONSENT Contract Law “Knowing” Consent • FAA • caselaw on jury- waiver clauses • constitutional waivers in criminal context • consent-to- jurisdiction clauses
- 17. STANDARDS OF CONSENT Contract Law “Knowing” Consent • FAA • caselaw on jury- waiver clauses • constitutional waivers in criminal context • jury-waiver clauses pre-Hendrix
- 18. Flaws of Hendrix • no precedent on point • no authority for jury-trial right “far more fundamental” than due process right • cites Fuentes without citing Mitchell or Bremen
- 19. STANDARDS OF CONSENT Contract Law “Knowing” Consent • FAA •Mitchell due process property deprivat. •Bremen and Carnival Cruise applied to non-U.S. forum •consent-to-jurisdiction clauses •jury-wavier clauses pre-Hendrix • caselaw on jury-waiver clauses • constitutional waivers in criminal context
- 20. ARBITRATION CLAUSES, JURY-WAIVER CLAUSES AND OTHER CONTRACTUAL WAIVERS OF CONSTITUTIONAL RIGHTS Stephen J. Ware sjware@samford.edu 205-726-2413